More and more countries report an increase in distressed property sales in their commercial markets. Numbers have steadily gone up between April and June this year and chances are they will continue to do so well into the next.
These worrisome figures were revealed in a survey of 27 countries by the U.K.’s Royal Institution of Chartered Surveyors.
Worst performers on the global scale:
Here is a run down of the worst performing countries in regards to distressed commercial property sales. The following are the net balance of numbers of surveyors who reported a rise in the distressed sales during the second quarter:
South Africa has definitely reported the biggest increase in distressed commercial sales as seen on this RICS survey. The group’s senior economist, Oliver Gilmartin said: “The number of distressed properties coming to market rose across every global region in the second quarter although record-low interest rates may be limiting the pain for some landlords.”
“Transaction activity in distressed properties is certainly set to rise in 2010 as interest from specialist funds gains traction.”
RICS also reported to have found an increase in speciality funds that were setup to allow funding for these properties. The U.K., Germany, Italy and the U.S. reported a major increase in the number of specialist funds used to purchase distressed commercial properties.
RICS also said that over the long term, property yields were “offering value in some markets when compared to historical averages” which in turn was attracting investor interest from people who are looking for long-term growth.
Graphics credits: WSJ